NEWTON - Attorney William M. Laufer was caught on a courtroom audiotape saying he had Morris County Prosecutor Fredric M. Knapp "in my pocket," but either made the comment in spontaneous jest or blurted out the remark to intimidate his adversary's client and imply he was overly influential, according to opposing attorney views at an ethics hearing.

A third hearing on whether Laufer - a prominent Morristown-based matrimonial lawyer who previously served for a decade as president of the board of directors of the Drug Abuse Resistance Education (DARE New Jersey) program - violated the rules of professional conduct for lawyers concluded Friday in Newton.

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Attorney William Laufer at his ethics hearing in Newton on Sept. 8, 2017.(Photo: Peggy Wright/Daily Record)

Knapp initially filed a grievance against Laufer, his former law firm partner for 17 years, with the state Office of Attorney Ethics in 2015 over the remarks. But the office dismissed Knapp's grievance, substituted its own complaint, and presented evidence that Laufer breached the rules of professional conduct over the course of three hearings before a three-member attorney-ethics panel.

Before hearing closing remarks on Friday from deputy Ethics Counsel Andrea Fonseca-Romen and Laufer's defense lawyer Larry Cohen, the panel heard testimony about Laufer's character from two witnesses called by Cohen. They were Nicholas DeMauro, a founder of DARE NJ, and Gary Skoloff, a matrimonial lawyer who authored treatises on New Jersey Family Law Practice and was the attorney for the infant's father in the landmark New Jersey surrogate mother case known as Baby M.

"I'm not here to be a judge and jury on what happened," DeMauro told the panel. "But I would stand in front of a bullet for that man," he said of Laufer.

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Nicholas DeMauro, a founder of the DARE NJ program, testifies on Sept. 8, 2017 as a character witness for attorney William Laufer, who is accused of ethics breaches.(Photo: Peggy Wright/Daily Record)

"He has a great reputation, an impeccable reputation. I always looked at Billy as the most ethical person I know," DeMauro said, adding that he also respects Knapp. He said he had not read the ethics complaint against Laufer but regards him as a "jokester," the kind of man who is fun and sociable.

"Not anywhere close," Skoloff replied, when asked by Cohen if Laufer had a reputation for engaging in unethical conduct. Cohen asked if Laufer had a reputation for being jovial or a "jokester."

"Oh yes, oh yes, oh yes," Skoloff said.

The ethics panel ordered that supplemental written closing statements be submitted by Oct. 13, after which it will make its decision within 60 days of Friday on whether the professional conduct rules were violated and whether any discipline is warranted. The panel could dismiss the Office of Attorney Ethics complaint, or recommend discipline for Laufer, a decision that would be reviewed by the state's Disciplinary Review Board for lawyers, and ultimately, the state Supreme Court.

The ethics panel members are attorneys Kevin O'Connor and Gregory Bevelak and non-attorney, public member Janet Detaranto.

Fonseca-Romen, the deputy ethics counsel, asked the panel to find that Laufer violated the rules, with his comments to adversary-attorney Angelo Sarno about the prosecutor suggesting he had undue influence over Knapp and striking fear in Sarno's client, whose name has been referred to at hearings by his initials.

But Cohen told the panel that Laufer made his comment about having Knapp "in my pocket" in jest during a private chat with Sarno in a Morris County courtroom in 2014.

Cohen noted that Fonseca-Romen did not call Sarno's client to testify at the ethics hearing though he was listed as a witness, and Cohen questioned the reasons for the client's non-appearance. Fonseca-Romen did not offer an explanation to the panel for the client's absence from the hearing, though his parents have attended the sessions.

Cohen said the ethics counsel had not proven by the standard of clear and convincing evidence that Laufer violated the rules of professional conduct but Fonseca-Romen disagreed.

Fonseca-Romen charged that Laufer has not taken responsibility for his comments while Cohen said that discovery in the case shows that Knapp himself initially opined the comment was a joke and only filed a grievance after Laufer's comment was the subject of a published news story on nj.com, seven months after it was uttered.

"Mr. Laufer called into question the entire reputation of the Morris County prosecutor in his statement," Fonseca-Romen said. She referred to testimony from Knapp at the first ethics hearing, at which he cried and detailed the hurt he felt upon reading the news story.

Cohen said that Laufer was being facetious about having the prosecutor "in my pocket" because they are not friends, after Knapp abruptly left their firm and took several attorneys with him to start a new firm before being appointed acting prosecutor in 2012 by Gov. Chris Christie. Knapp was confirmed as the prosecutor by the state Senate in June 2014 and sworn to the post in July 2014, which is when his five-year appointment officially began.

Laufer had testified at a hearing in July, saying the comment about Knapp to Sarno was facetious, with no malice behind it. He said he later tried to apologize to Knapp, who dismissed his attempt with a profane remark, as well as to Knapp's wife, who told him the apology attempt was probably too late.

Laufer's comments, captured on Dec. 1, 2014 on the Superior Court's "CourtSmart" audio-taping equipment in Morristown, included remarks that Knapp does anything he asks and that Laufer has Knapp "in my pocket."

Laufer in July told the panel he regrets the remarks he made about Knapp to Sarno during a court break in a Family Court domestic violence proceeding in Morristown.

"I'll be honest with you, in my 43 years of practice, if I could take back 30 seconds of time when I said something I probably shouldn't have said, I would. But you have to understand. It was a joke. It was said in jest. It was, what's the word? Facetious. It was something that was said after the judge went off the bench," Laufer testified in July.

The ethics complaint accuses Laufer of three breaches of the rules of professional conduct: engaging in conduct involving dishonesty, fraud, deceit or misrepresentation; engaging in conduct that is prejudicial to the administration of justice; and stating or implying an ability to influence improperly a government agency or official.

The controversy stems from the Dec. 1, 2014 hearing during which the male litigant in the domestic violence case had, allegedly, obtained surveillance images of portions of the interior and exterior of his now-ex-wife's home. Laufer told Superior Court Judge Louis Sceusi that he wanted the prosecutor's office to investigate what he believed was tantamount to an illegal wiretap. The judge took a recess but CourtSmart was still running when Sarno asked Laufer whether the prosecutor was his former law partner.

Cohen, Laufer's defense lawyer, told the panel Friday that the litigant suffered no consequences over the allegation he invaded his wife's privacy.

Laufer has testified that he wasn't sure where the male litigant was sitting at the time but he made brief, "facetious" comments to Sarno that he had Knapp "in my pocket." He also made an alleged disparaging remark about Knapp's productivity during their partnership. Sarno has not been accused of any ethical violations in connection with the case.

"He does, whatever I ask, he does," Laufer said of Knapp, according to the CourtSmart tape.

Now-retired Superior Court Assignment Judge Thomas Weisenbeck was called by Laufer's lawyer at the July hearing to testify that he received a request for the CourtSmart tape in January 2015 from the male litigant in the domestic violence case. Because the CourtSmart tape is not automatically a public record, Weisenbeck said, he listened to it and ultimately released it to the litigant. The story by nj.com later was written about the recording.

"I believe that this was Mr. Laufer joking with a colleague. An adversary but a colleague," Weisenbeck said.

If the ethics complaint against Laufer is not dismissed, he could face punishment that ranges from admonition, reprimand, censure, suspension and disbarment, the latter two reserved for egregious violations that typically involve deliberately deceptive or negligent conduct or theft of client funds.